Once, many of the issues we talk about on this blog were discussed mostly among Rust Belt labor unions or in street demonstrations. But tough questions are increasingly being asked in a variety of places, from the ivory tower to the campaign stump... and in both instances, the focus is on a change in the rules of globalization, rather than perpetuating the stale debate about whether "yes" or whether "no" on globalization. Witness Harvard's Dani Rodrik's new paper, articulating what he says is now the "new orthodoxy" on trade:

We can talk of a new conventional wisdom that has begun to emerge within multilateral institutions and among Northern academics. This new orthodoxy emphasizes that reaping the benefits of trade and financial globalization requires better domestic institutions, essentially improved safety nets in rich countries and improved governance in the poor countries.

Rodrik goes on to push this new orthodoxy further, articulating what he calls his "policy space" approach, allowing countries to negotiate around opting-in and opting-out more easily of international rules and schemes as their development and domestic needs merit. Citing the controversy around NAFTA's investor-state mechanism and the WTO's challenge of Europe's precautionary approach in consumer affairs, Rodrik poses the following challenge to the orthodoxy:

Globalization is a hot button issue in the advanced countries not just because it hits some people in their pocket book; it is controversial because it raises difficult questions about whether its outcomes are “right” or “fair.” That is why addressing the globalization backlash purely through compensation and income transfers is likely to fall short. Globalization also needs new rules that are more consistent with prevailing conceptions of procedural fairness.

And this focus on a change of rules hit the political arena today, with a major policy speech by former Sen. John Edwards (D-N.C.). See here. Among the important points, that thus far are only being articulated by Edwards among the top candidates:

For years now, Washington has been passing trade deal after trade
deal that works great for multinational corporations, but not for
working Americans. For example, NAFTA and the WTO provide unique rights for foreign
companies whose profits are allegedly hurt by environmental and health
regulations. These foreign companies have used them to demand
compensation for laws against toxins, mad cow disease, and gambling -
they have even sued the Canadian postal service for being a monopoly.
Domestic companies would get laughed out of court if they tried this,
but foreign investors can assert these special rights in secretive
panels that operate outside our system of laws.

The trade policies of President Bush have devastated towns and
communities all across America. But let's be clear about something -
this isn't just his doing. For far too long, presidents from both
parties have entered into trade agreements, agreements like NAFTA,
promising that they would create millions of new jobs and enrich
communities. Instead, too many of these agreements have cost us jobs
and devastated many of our towns.

NAFTA was written by insiders in all three countries, and it served
their interests - not the interests of regular workers. It included
unprecedented rights for corporate investors, but no labor or
environmental protections in its core text. And over the past 15 years,
we have seen growing income inequality in the U.S., Mexico and Canada.

Today, our trade agreements are negotiated behind closed doors. The
multinationals get their say, but when one goes to Congress it gets an
up or down vote - no amendments are allowed. No wonder that
corporations get unique protections, while workers don't benefit.
That's wrong.

So, our movement has made real progress when things like Chapter 11, Fast Track and the precautionary principle are even being discussed by politicians and academics in the context of trade policy debates. And hopefully Edwards' raising of these issues will put pressure on the other candidates to follow suit. In the meantime, you can help turn the nice words into action by clicking here.

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About Us

Eyes on Trade is a blog by the staff of Public Citizen's Global Trade Watch (GTW) division. GTW aims to promote democracy by challenging corporate globalization, arguing that the current globalization model is neither a random inevitability nor "free trade." Eyes on Trade is a space for interested parties to share information about globalization and trade issues, and in particular for us to share our watchdogging insights with you! GTW director Lori Wallach's initial post explains it all.

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